Wall Street sets another record as JPMorgan leads banks higher

NEW YORK (Reuters) - Financial stocks led the S&P 500 and the Dow industrials to record highs on Thursday after JPMorgan’s strong quarterly results, while upbeat economic data cemented bets that the current rally on Wall Street can chug along.

JPMorgan (JPM.N), the biggest U.S. bank by assets and the first among its peers to issue results this earnings season, reported a much better-than-expected rise in quarterly revenue.

Support for stocks came also in the form of strong U.S. economic data. Filings for unemployment benefits unexpectedly held steady near a 43-year low last week, while producer prices recorded their biggest gain in a year in June.

Besides banks, cyclical sectors like materials, technology and consumer discretionary, expected to outperform in an environment of economic expansion, also posted strong gains while the only sector to post a loss was defensive utilities.

“We had a couple of good data points and on that basis the market has continued to grind higher,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.

Despite lauding JPMorgan, Orlando was skeptical its peers could match the bank’s results.

“Not everyone is able to operate as well as JPMorgan,” he said. “They’ve shown us what’s possible with good management but that doesn’t mean everyone will perform equally well.”

Completing a stocks trifecta with strong data and upbeat earnings, monetary policy is expected to continue to support higher prices both in the United States and globally.

Atlanta Federal Reserve President Dennis Lockhart said the Fed should remain “cautious and patient” with any future interest rate increases, while the Bank of England, although it kept rates on hold on Thursday, held out the prospect of a stimulus package soon to help the economy cope with Britain’s vote last month to leave the European Union.

The more upbeat view on equities brought down the cost of protection against a decline on the S&P 500. The CBOE Volatility index .VIX closed at its lowest in 11 months.

Results so far have been reassuring. KFC owner Yum Brands (YUM.N) rose 3 percent to $88.27 a day after its key China business showed signs of strength.

Delta's (DAL.N) higher-than-expected quarterly profit sent its shares 3.6 percent higher. An industry index .XAL has risen almost 12 percent over the past six sessions.

Shares of Japanese messaging app operator Line Corp (LN.N) soared as much as 37 percent in their U.S. market debut in the biggest tech IPO this year. Shares closed up 26.6 percent at $41.58.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2016. REUTERS/Brendan McDermid

Advancing issues outnumbered declining ones on the NYSE by a 1.35-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored advancers.

The S&P 500 posted 68 new 52-week highs and no new lows; the Nasdaq Composite recorded 124 new highs and 20 new lows.

About 6.5 billion shares changed hands in U.S. exchanges, compared with the 7.8 billion daily average over the past 20 sessions.